No. 133. ANALYZING THE UNLEADED GASOLINE RETAIL PRICE PATTERNS IN GREECE: APR. 2011 – DEC. 2012 (in Greek)

Published in DISCUSSION PAPERS

P. Prodromídis, S. Petros, A. Petralias. 2013.

 

The paper studies the daily price patterns of unleaded gasoline across fueling stations in Greece during April 2011-December 2013 by (a) econometrically estimating the impact of refinery prices, brands, geography, the number of competitors in the area, the day of the week, seasonality and strikes in the transportation sector on average gasoline prices at the local community level (194 thousand observations), and (b) exploring price-leadership among vendors in Athens, Thessaloniki and a number of other large municipalities via causality tests. The findings suggest that: Marginal increments in (after-taxes) refinery prices were passed onto the final con-sumer. The average price difference from factory to pump in Athens was about 18 cents per litre, increased at a decreasing rate, displayed seasonality, and was probably lower in midweek. Furthermore, while prices varied across space, they did not (i) follow the conventional regional division of the country or (ii) depend on the number of petrol stations operating in local communities as much as they depended on brands. Of the retailers with the largest number of petrol stations (also subsidiaries of the two refineries operating in Greece), EKO stations were generally cheaper, Shell stations were more expensive, and BP stations even more expensive. Howev-er, it was the medium-sized Aegean that appeared to be able to read market condi-tions, sense when it was time for price change and generally act as a barometer in the markets of Thessaloniki, Piraeus, Patras, and, probably, Larisa. Overall, the evidence regarding systematic, coordinated price-setting practices in retail suggests that these practices were probably local rather than nationwide, which, in turn, sug-gests that competition, too, varied across the country. While in Athens and Piraeus price changes were affected by changes occurring on the previous day (one-day time lag), in Thessaloniki, Patras, Iraklion and Larisa reactions were slower: taking two to five days. Strikes in taxis, the capital’s suburban rail and subway system had a positive effect on gasoline prices, while dock and other shipping-related strikes seem to have generated the opposite effect.

 

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